Feb. 7 (Bloomberg) -- Yandex NV rallied to its most
expensive level ever versus Russian stocks traded in the U.S. as
the company overtook Microsoft Corp. on global Internet searches
and web advertising grew in 2012.

Shares of Yandex jumped 1.7 percent to $24.33 in New York
yesterday, the highest level this week. Russia’s most-used
search engine traded at 28.6 times estimated earnings, more than
six times the average valuation of companies listed on Bloomberg
Russia-US Equity Index. The gauge of the most-traded Russian
stocks in the U.S. fell 0.7 percent. Futures on the RTS Index
slipped 0.3 percent to 159,610 by 5:28 p.m. in Moscow.

Yandex unseated Microsoft’s Bing to become the world’s
fourth-biggest engine by number of searches in November for the
first time on record, ComScore Inc. said yesterday. Web
advertising in Russia, home to at least 16 million Internet
users, rose 35 percent in 2012, outpacing 13 percent growth in
total advertising, data released Feb. 5 showed. Yandex got 90
percent of third-quarter revenue from text-based ads.

“Russian speakers prefer Internet searches in Russian, and
Yandex firmly holds the biggest share, competitors are nowhere
near it,” Konstantin Chernyshev, the head of research at
UralSib Capital Corp., which rates Yandex a buy, said by phone
from Moscow yesterday. “The Russian Internet advertising market
expands and Yandex wins. You don’t advertise your shoe repair
kiosk on national television, you advertise it on Yandex.”

Russia’s Micex Index fell 0.5 percent to 1,523.12 today,
led by LSR Group and OAO Sberbank, the nation’s largest lender.

Growing Market

The Russian advertising market grew to 300 billion rubles
($10 billion) in 2012, with Internet ads expanding more than any
other segment of the market, according to the Association of
Communication Agencies of Russia, or AKAR. The data excludes
value-added tax, AKAR said in a statement on its website.

Online advertising in Russia will rise by an average 22
percent a year between 2013 and 2016, UralSib’s Chernyshev said.

While Yandex, which has jumped 13 percent in New York this
year, surpassed Microsoft’s Bing by number of searches, it
trailed Google Inc., Beijing-based Baidu Inc. and Yahoo! Inc.,
Reston, Virginia-based ComScore said yesterday.

Searches on Yandex rose to 4.6 billion in November and 4.8
billion in December, while the tally for Bing held at 4.5
billion in both months. The Russian Internet company had the
lowest number of so-called unique searchers among the world’s
five biggest providers, the data showed. Yandex had 74.4 million
users in December, compared with 268.6 million for Microsoft,
according to ComScore.

‘Russian Audience’

“It’s thanks to the Russian audience that the number of
Yandex searches grew,” Tatiana Komarova, a Moscow-based
spokeswoman for the company, said by e-mail yesterday.
“Internet penetration is still low in Russia and it continues
to grow by adding older people and residents of small towns.”

Russia had 16.1 million IPv4 addresses in the third quarter
of last year, compared with 99 million in China, 145 million in
the U.S. and 683 million worldwide, according to Akamai
Technology’s State of the Internet report released last month.
Internet penetration in the world’s largest energy exporting
nation grew 23 percent year-on-year, the data showed.

Tara Gremillion, spokeswoman for Waggener Edstrom
Worldwide, a media relations company for Microsoft, did not
immediately respond to an e-mailed request for comment on the
ComScore rankings.

Ruble Futures

Futures expiring in March on the ruble show the currency
strengthening 0.1 percent to 30.231 per dollar, after the ruble
slid 0.5 percent to 30.088 against the dollar yesterday. The
Russian currency was 0.1 stronger at 30.0485 per dollar today.

Oil, which together with natural gas makes up about 50
percent of Russian budget revenue, gained 0.2 percent to $96.83
a barrel today in New York. Brent oil for March settlement rose
0.7 percent to $117.53 per barrel on the London-based ICE
Futures Europe exchange. Urals crude, Russia’s chief export
blend, increased 0.1 percent to $115.15.

American depositary receipts of Moscow-basedSberbank fell
1.1 percent to $14.27 in New York yesterday, the lowest close
since Jan. 25. The lender, which reported a 9 percent jump in
January net income today, lost 1.4 percent in Moscow to 105.40
rubles, or $3.51.

Sberbank said in a statement yesterday that its depositary
receipt program had reached its limit.

Bank of New York Mellon Corp. halted Sberbank’s DR program
under, where investors convert local shares into foreign-traded
stock, according to a statement dated Feb. 5. DRs can only
account for 25 percent of a company’s shares and 50 percent of
its listed shares, under Russian regulations.

United Co. Rusal, the world’s largest aluminum producer,
rose 2 percent to HK$4.54 in Hong Kong, rising for the first
time in eight days.